ChainCatcher report, according to Economic Daily News, the quantitative hedge fund industry experienced a systemic drawdown in July, with multiple institutions seeing monthly net value declines exceeding 20%, turning their year-to-date returns negative. Specifically, among the nine products disclosed by Huanfang Quantitative, eight have recorded negative year-to-date returns, with all posting monthly losses exceeding 20% and a maximum drawdown of 22.15%. Of the 14 products disclosed by Mingqiu Investment, nine have posted negative returns for the year. Among the 15 products from Jiukun Investment, 14 still maintain positive year-to-date returns, though their monthly drawdowns were also significant. In contrast, Yanfu Investment demonstrated relatively more stability. Regarding this drawdown, multiple institutions believe the current correction is primarily driven by sentiment and trading structure rather than the end of the AI industry trend. Dianshuiquan Investment noted that AI continues to rapidly advance in areas such as model capability enhancement, reduced usage costs, and expanding application scenarios. Drawing parallels with the internet era, fluctuations during technological waves are normal. Institutions believe AI investment is gradually transitioning from the “first half,” focused on computing infrastructure, to the “second half” of “intelligence democratization”—a phase characterized by continuously falling costs of intelligent applications and accelerated unlocking of use cases. Supply chain companies capable of delivering high-cost-efficiency solutions to leading model developers and major cloud providers stand to benefit.
Quant hedge funds faced sharp drawdowns in July, with Huafang products declining over 20%.
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Summary
July’s market volatility drove the Fear & Greed Index to extreme levels as quant funds suffered sharp losses. Huafang Quant’s nine products saw eight record negative annual returns, with monthly drawdowns exceeding 20%, peaking at 22.15%. Minguo and Jiukun also reported declines. Firms attribute the downturn to emotional and structural trading, not a decline in AI momentum. Fosun Fund noted the sector is shifting from computing power to intelligent democratization, where cost reductions and expanded use cases could drive a bullish trend for supply chain participants.
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